Sandwich shop Jersey Mike's has approached the market with the fourth securitization from its shelf established in 2019, a $400 million, single-tranche deal rated BBB by both KBRA and S&P Global Ratings.
Guggenheim Securities is sole structuring advisor and lead left bookrunner on the deal, with FTI Consulting stepping up as back-up manager and Citibank as trustee, according to a July 24, 2025 presale report by KBRA.
The sandwich-shop franchiser priced a $750 million securitization from the shelf last December, and a $500 million transaction in 2021. KBRA notes that as of March 20 the company had 3,045 locations in the U.S. compared to 2,916 at the end of last September, and system wide sales of $3.9 billion compared to $3.7 billion as of the same dates.
The transaction adjusted annualized securitized net cash flow and leverage also increased, in the first case to $367 million from $326 million, and in terms of leverage to 6.1 times compared to 5.7 times, according to KBRA.
The rating agency says that Jersey Mike's restaurants are spread across all 50 states, and that master trust collateral includes existing and future domestic franchise and development agreements, other franchisee and license fees, vendor programs and payments, and domestic intellectual property.
More than half the deal's cash flows (53.3%) stem from net franchise royalties, and the remainder from vendor program payments (36.1%), technology and support fees (8.8%), and various other fees.
"These payments are generally less volatile than other income streams, such as profits from company-operated locations," KBRA says. "In addition to transaction fees and expenses, the proceeds from the Series 2025-1 Notes are being used for general corporate purposes and to fund one or more dividends to the owners."
A key credit consideration, according to KBRA, is New Jersey Mike's experienced senior leadership team, with nearly 20 years of industry experience on average, that includes founder Peter Cancro, the prior CEO and current chairman.
Blackstone acquired a majority stake in the company in January and announced in April the appointment of Charlie Morrison, former CEO and chairman of Wingstop, as the current CEO.
In terms of risks, KBRA says, the "fast-casual industry" in which Jersey Mike's operates is highly competitive and overall has seen traffic and same store sales (SSS) decline, although the sandwich vendor's SSS have grown 9.6% on average from 2020 and were up 4.9% in Q1.
